Ad fraud


Ad fraud is the practice of fraudulently creating or simulating online advertisement impressions, clicks, conversions, or data events in order to generate revenue. Ad fraud is the categorical term inclusive of all forms of online advertising fraud, including click fraud. While ad fraud is frequently associated with banner ads, video ads, and in-app ads, click fraud has been associated with search marketing, mobile advertising, and conversion fraud with affiliate marketing.
Ad fraud is a type of cybercrime. A successful ad-fraud campaign generally involves a sophisticated combination of identity fraud and attribution fraud: for instance, sending fake traffic through bots using fake social accounts and falsified cookies; bots will click on the ads available on a scam page that is faking a famous brand.

History

Research papers covered the topic at least as early as 1999. In 2004, Google's CFO George Reyes said that click fraud was the biggest threat to the Internet economy.
In 2016, HP Enterprise in its Business of Hacking report highlighted ad fraud as the easiest and the most lucrative form of cybercrime at that time. That year, the World Federation of Advertisers published its first guidance on ad fraud to advise its members on how to counter the problem that was allegedly eating close to US$20 billion of member ad budgets in 2015. As of 2016, there were four notable non-profit organizations focused on creating awareness and availability of resources for countering ad fraud: Botlab, JiCWEBS, Media Rating Council, and Trustworthy Accountability Group. Each published various guidelines and commentaries on ad fraud, most notable of which was the Media Rating Council's Invalid Traffic Detection Guidelines.
In 2017, P&G and Chase suspended their digital ad budget of $200 million and reduced their ad shares from 400 thousand to 5 thousand in an attempt to reduce their exposure to ad fraud.
AppsFlyer estimated financial exposure to app install fraud in Q1 of 2018 was as much as $800 million.
A study conducted in 2023 found that the average rate of fraudulent activities in search engine advertisements is approximately 11.5%. This statistic highlights the growing importance of implementing effective fraud protection measures in search engine marketing to combat ad fraud. In 2024, the share of malvertising increased by 10%, with 70% of users distrusting online advertising. A joint study between Juniper Research and Fraud Blocker found the cost of fraud in digital advertising globally was $88 billion in 2023; growing to $172 billion by 2028.

Classifications

Types of fraud

  • Bots / Non-human traffic ad fraud
  • Click farms ad fraud
  • Ad injection fraud
  • Domain name spoofing
  • Cookie stuffing
  • Ad hijacking – When unauthorized parties imitate a brand's paid ads and redirect traffic through their own links to earn commissions or steal clicks.

Formats

  • Banner
  • Video
  • In-app
  • Social